International Trade Committee on Dec. 1st, 2025

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That's fine.

When that happened, how did you get together with your executive team and your board to be able to address production and those costs? Did you shore up...? Did you purchase more of the steel and aluminum you required? Did you look at production?

[Martin Gendreau]

We loaded up a lot. We were lucky that we had just purchased a large factory in Barrie, Ontario, the former RadioShack head office. We were able to load up raw materials before that. This plant was purchased last fall before the election in the U.S. and the goal of it was to export product to the U.S. Now it's a new story. We did that.

As I said in our opening remarks, right now our strategy is really to produce in Canada what is for Canada and produce in the U.S. what is for the U.S. market. We made a major capital investment in our Minnesota plant to be able to transfer production to avoid the tariff because our customers in the U.S. don't want to pay a 50% tariff. They cannot afford it.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Okay. Now you are producing for the domestic market here in Canada, from your plants here, and then in the U.S.

Before this, what was the business plan? What percentage would you export into the U.S., and what percentage would be imported here from your U.S. plant?

[Martin Gendreau]

We made the investment in Minnesota, but that will be effective later next year. Right now, about 30% of our Canadian production of garage doors goes to the U.S. Our goal was to grow that, because although we have an important market share in Canada, there was more growth opportunity to the U.S.

However, as I said, if we can get the help of the government to get reciprocal tariffs, we'll be able to get market share of the Canadian customers who buy the U.S. product. We need to be able to sell the 30% we were exporting to the U.S. domestically within Canada.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That's the 50% that you would like to be reciprocal with the U.S.

Mr. Tisch, I have some questions here.

From the Ontario perspective, this is about which elements.... This CUSMA review that we're doing here is also about diversification. From 2018 to 2025, we increased our exports beyond the United States by 50%. From what you've heard from your members, what more can we do to achieve the next 50% goal in terms of diversification outside of the U.S.?

[Daniel Tisch]

I alluded in my remarks to some things that Canadian businesses need. I think the reality is that businesses need capacity and need capabilities. The government, I think, is going in the right direction here, but I do worry that for too many businesses, there's still a sense of inertia, not surprisingly, and the single best thing we can do is to get businesses to invest in themselves.

I gave the example in the advocacy we put forward to the committee today about matching Ontario's 15% manufacturing investment tax credit to get businesses to invest in themselves, but the other piece is helping businesses to de-risk international diversification by ensuring that government is working with businesses to strengthen the trade commissioner service and to strengthen the EDC's capacity to help businesses reach and tap into high-growth and non-traditional markets. I think it's targeting high-potential sectors as well, where we have high export and competitive advantage. I'd say those are defence aerospace, digital, AI, quantum, critical minerals, clean tech, infrastructure and nuclear areas.

It's a matter of being very strategic, but it's also about how we can de-risk the diversification proposition. It's replacing complacency with competitiveness. It's replacing dependence on one market with diversification to many, but I think businesses need the government at their side to de-risk that proposition.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Now we're moving on to Mr. Savard-Tremblay for two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Thank you.

Mr. Tisch, you described American tariffs as “massive self-harm”.

In your opinion, what measures or requirements should we add to the agreement to primarily make sure the U.S. government will not invoke a national emergency or section 232 of the Trade Expansion Act of 1962 to circumvent the agreement?

[Daniel Tisch]

In line with what my colleague here from the BC Lumber Trade Council has indicated, I think we have to pursue the bilateral track so that we get relief from the sectoral tariffs. At the same time, the best guarantee of our security is the renewal of the Canada-U.S.-Mexico trade agreement. We have to very much protect that trilateral conversation and the trilateral negotiating process. We have to do both at the same time.

If there is any insurance policy, it's the more that we can do.... Since we can't control the U.S., it's to control the things that we can here in Canada. That's why I come back to taking measures and being even more aggressive.

We think the government went in the right direction with a lot of measures in the budget. We like, for instance, the superdeduction, but the general conversation in the business community is that although they like it so far, they're not sure if it's going to be enough. Hence our proposal, in the case of manufacturing, to move from a tax deduction to a tax credit, which we think would have more of an effect in incentivizing businesses to invest in themselves.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Have you seen waves of relocation to avoid tariffs among the members of the Ontario Chamber of Commerce?

If so, have you identified any specific sectors?

[Daniel Tisch]

When you say reshoring, do you mean to the U.S., or do you mean to Canada?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

I mean members of the Ontario Chamber of Commerce that would relocate to the neighbouring U.S. to avoid tariffs.

[Daniel Tisch]

One thing I mentioned in my remarks was that, in our survey, only 4% of businesses responding said that they would even consider relocating part of their operations to the U.S. We don't see that happening in a big way. I mean, the reality is that the U.S., frankly, right now is a risky investment proposition because no one knows whether these tariffs are permanent or are just a negotiating strategy. I'm not sure that the president himself even knows from day to day. That makes it a very risky proposition.

Certainly, there will be businesses that might move one production line there, as they would normally in any case, depending on the incentives, the availability of a workforce on the ground or being closer to customers in the normal course of things. There might even be some PR wins, if you will, for the U.S. However, fundamentally, you see manufacturing and construction investments in the U.S. going down, not up. You see manufacturing employment in the U.S. going down, not up in 2025.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Tisch.

We'll move on to Mr. Chambers, please, for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Madam Chair. I appreciate the opportunity to have a round here. You're running a very efficient meeting. Thank you for letting a third round go.

Mr. Tisch, just thinking about Ontario and the broader Canadian economy—but Ontario is obviously a manufacturing hub in the country, as is Quebec, of course—and the status quo that we're in today.... How much longer can the economy sustain this kind of limbo period without any certainty in the relationship with America, whether that's the CUSMA—NAFTA—renegotiation or the current unjustified tariffs?

[Daniel Tisch]

It's very hard to speculate on that, Mr. Chambers. I've seen numbers suggesting that the scenario we're now in—of everything that was estimated earlier in the year as to what the impact of the tariffs would be—is still in the best-case scenario. We came very close to tipping into recession, as did the U.S., but we didn't. Unemployment levels seem to have stabilized. The forecast in Ontario I think is for 0.9% economic growth in 2026. This year it'll be, you know, maybe 0.8%. We'll see where it ends up at the end of the year.

However, none of this is success, so I say respectfully that the job of our elected leaders is to help work with businesses and prepare us for a future where the U.S. will remain our largest trading partner—I don't see any scenario where that's not the case—but where we're, at the same time, far more diversified and far more competitive. I think that's why we come back to investing in the infrastructure of independence—with airports, seaports, high-speed rail and all the other things that are going to help us trade across the country—showing continued leadership in bringing down interprovincial trade barriers and helping businesses, being their partner, to diversify.

The more we can ensure that growth is led by the private sector and involves private sector investment, the more successful we're going to be.

[Adam Chambers, Conservative, Simcoe North, ON]

You would say, though, that it's existential that we have a solution or some kind of conclusion, the best that we can, with our largest trading partner, which you acknowledge is likely to remain our largest trading partner. Is that correct? We can't sustain a status quo indefinitely.

[Daniel Tisch]

We need a resolution with the U.S., given how much.... I forget the number, but I think it's 26% of our GDP that depends on trade, and three-quarters of that is with the U.S. Naturally, there would be tremendous economic pain if some form of access to the U.S. market is not maintained.

However, the thing that I take some solace in is that our colleagues with whom we speak all the time in the U.S. business community are 100% aligned with us on this front, and they're making that case very forcefully to the administration.

[Adam Chambers, Conservative, Simcoe North, ON]

All right.

Would it be fair to say 1% or 1.2% economic growth isn't anything to write home about?

You mentioned some companies might not be leaving, according to your survey, which might be optimistic, but certainly there are no new investments in manufacturing capabilities while we're in this limbo period. Is that correct? If you're making an investment decision, you're probably waiting to see how it goes.

[Daniel Tisch]

Capital wants certainty, and it's sitting on the sidelines in a big way right now not just in Canada but in the U.S. as well. Business wants predictability. We need to know what the rules are, and that de-risks the investment proposition.

I agree with you. This level of growth is not what we should be aiming for. The president says, “America first”, and I think right now it's North America last if this trade policy continues. That's why I have some optimism that there are enough voices of common sense in America that are saying what we're saying. The challenge is, of course, to continue to work at a business-to-business level with both Republican and Democratic governors who believe in the trade agreement and ensure we protect this vital access to our largest trading partner while diversifying our trade to other economies.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Lavoie, you have five minutes, please.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Madam Chair.

I’d like to thank the witnesses for getting involved in this matter today.

My main questions are for Mr. Gendreau.

Good afternoon, Mr. Gendreau. It’s a pleasure to have a manufacturer here with us.

We know the situation with the U.S. is exceptional. A number of experts have appeared before the committee and they have said such a situation has not been witnessed in history. These are people that have been involved in negotiations for over 50 years.

As you said from the outset, we’d all like this situation to be resolved in the near future. However, right now, we don’t know if it will be resolved in the near future. It may take months and years before it is resolved. I’m not a prophet of doom, but that’s how some situations unfold.

I have financed businesses in the past that went through challenging cycles in their sector. The businesses that fared better were often those that invested more during difficult periods.

As a manufacturer, have you made any investments in recent years?

Do you have any investment plans to shore up production, reduce costs and remain competitive, despite the current situation? We don’t know if it can be resolved in the near future. It could take years, but businesses must continue to operate.

Do you have a back-up strategy, or are you just waiting to see whether this tariff issue will be resolved?

[Martin Gendreau]

Thirty per cent of our production was destined for the U.S. All available capital and production were relocated to the U.S., to our plant in Minnesota. We had to invest $20 million to manufacture the same products in the U.S. as those made in Canada to serve the U.S. market.

We invested in the U.S. to serve that market.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Right now, you have invested $20 million in a plant in Minnesota, primarily in—

[Martin Gendreau]

It’s an investment in production capacity.